00007302002011-12-042012-12-030000730200trptsif1:S000039057Membertrptsif1:C000119985Member2011-12-042012-12-030000730200trptsif1:S000039057Member2011-12-042012-12-03pureiso4217:USD485BPOST. Rowe Price Tax-Free Short-Intermediate Fund, Inc.0000730200false2012-12-032012-11-192012-11-21000200.003800.00190.0057-0.00220.003536123<font style="font-family: Arial; font-size: 14pt">T. Rowe Price</font><br/><br/><font style="font-family: Arial; font-size: 24pt; COLOR: #004f7c; FONT-WEIGHT: bold">Tax-Free Ultra Short-Term Bond Fund</font><br/><br/><font style="font-family: Times New Roman; font-size: 14pt; COLOR: #004f7c; FONT-WEIGHT: bold">SUMMARY</font><font style="font-family: Arial; font-size: 9.5pt; COLOR: #004f7c"><b>Investment Objective</b></font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">The fund seeks a high level of tax-exempt income consistent with minimal fluctuations in principal value and liquidity.</font><font style="font-family: Arial; font-size: 9.5pt; COLOR: #004f7c"><b>Fees and Expenses</b></font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">This table describes the fees and expenses that you may pay if you buy and hold shares of the fund.</font><font style="FONT-FAMILY: Arial; COLOR: #004f7c; FONT-SIZE: 8pt; FONT-WEIGHT: bold"><i>Fees and Expenses of the Fund</i></font><br/><p style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: Arial; COLOR: #004f7c; FONT-SIZE: 8pt; FONT-WEIGHT: bold">Shareholder fees (fees paid directly from your investment)</p><p style="TEXT-ALIGN: center; FONT-STYLE: italic; FONT-FAMILY: Arial; COLOR: #004f7c; FONT-SIZE: 8pt; FONT-WEIGHT: bold">Annual fund operating expenses<br/> (expenses that you pay each year as a <br/>percentage of the value of your investment)</p><font style="FONT-FAMILY: Sans-Serif; FONT-SIZE: 9.5pt; FONT-WEIGHT: bold">Example</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the fund for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year, the fund&#8217;s operating expenses remain the same, and the expense limitation currently in place is not renewed. Although your actual costs may be higher or lower, based on these assumptions your costs would be: </font><font style="font-family: Arial; font-size: 9.5pt"><b>Portfolio Turnover</b></font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">The fund pays transaction costs, such as commissions, when it buys and sells securities (or &#8220;turns over&#8221; its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the fund&#8217;s performance. </font><font style="FONT-FAMILY: Arial; COLOR: #004f7c; font-size: 10pt; FONT-WEIGHT: bold">Investments, Risks, and Performance</font><br/><br/><font style="FONT-FAMILY: Arial; FONT-SIZE: 9.5pt; FONT-WEIGHT: bold">Principal Investment Strategies</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">The fund invests in a diversified portfolio of shorter-term investment-grade municipal securities. Normally, the fund will invest at least 80% of its net assets (including any borrowings for investment purposes) in bonds and all of the securities purchased by the fund will be rated investment-grade (AAA, AA, A, BBB, or an equivalent rating) at the time of purchase by at least one of the major credit rating agencies or, if unrated, deemed to be investment-grade quality by T. Rowe Price. While the fund may purchase an individual security with a maturity of up to 5 years, under normal conditions the fund&#8217;s dollar-weighted average effective maturity will be 1.5 years or less. <br/><br/>Investment decisions reflect the portfolio manager&#8217;s outlook for interest rates and the economy, as well as the prices, yields, and credit quality of various securities in which the fund may invest. For example, if interest rates are expected to fall, the fund may purchase longer-term securities (to the extent consistent with the fund&#8217;s investment program) in an attempt to seek higher yields and/or capital appreciation. Conversely, if interest rates are expected to rise, the fund may seek securities with shorter maturities. <br/><br/>Normally, at least 80% of the fund&#8217;s income will be exempt from federal income taxes. However, up to 20% of the fund&#8217;s income could be derived from securities subject to the alternative minimum tax. <br/><br/>From time to time, the fund may invest a significant portion of its assets in sectors with special risks, such as health care, transportation, utilities, or private activity bonds. The fund may sell holdings for a variety of reasons, such as to adjust the portfolio&#8217;s average maturity, duration, or overall credit quality, or to shift assets into and out of higher-yielding or lower-yielding securities or certain sectors. </font><font style="FONT-FAMILY: Arial; FONT-SIZE: 9.5pt; FONT-WEIGHT: bold">Principal Risks</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">As with any mutual fund, there is no guarantee that the fund will achieve its objective. The fund&#8217;s share price fluctuates, which means you could lose money by investing in the fund. The principal risks of investing in this fund are summarized as follows:</font><br/><br/><font style="FONT-STYLE: italic; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; font-size: 10pt">Active management risk </font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt"> The fund is subject to the risk that the investment adviser&#8217;s judgments about the attractiveness, value, or potential appreciation of the fund&#8217;s investments may prove to be incorrect. If the securities selected and strategies employed by the fund fail to produce the intended results, the fund could underperform other funds with similar objectives and investment strategies. </font><br/><br/><font style="FONT-STYLE: italic; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; font-size: 10pt">Credit risk </font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt"> This is the risk that an issuer of a debt security could suffer an adverse change in financial condition that results in a payment default, security downgrade, or inability to meet a financial obligation. Economic downturns often result in reduced levels of taxes collected and revenues earned for municipalities. This, in turn, lessens the financial strength of a municipality and increases the credit risk of the securities it issues. </font><br/><br/><font style="FONT-STYLE: italic; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; font-size: 10pt">Interest rate risk </font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt"> This is the risk that a rise in interest rates will cause the price of a fixed rate debt security to fall. Prices fall because the bonds and notes in the fund&#8217;s portfolio become less attractive to other investors when securities with higher yields become available. Generally, securities with longer maturities and funds with longer weighted average maturities carry greater interest rate risk. During periods of extremely low or negative interest rates, the fund may not be able to maintain a positive yield or yields on par with historical levels. </font><br/><br/><font style="FONT-STYLE: italic; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; font-size: 10pt">Municipal securities risk</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt"> The fund will be highly impacted by events tied to the overall municipal securities markets, which can be very volatile and significantly affected by unfavorable legislative or political developments and adverse changes in the financial conditions of municipal securities issuers and the economy. Income from municipal securities held by the fund could be declared taxable because of changes in tax laws or interpretations by taxing authorities, or noncompliant conduct of a municipal security issuer. In addition, a portion of the fund&#8217;s otherwise tax-exempt dividends may be taxable to those shareholders subject to the alternative minimum tax.</font><br/><br/><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">Certain sectors of the municipal bond market have special risks that can impact such sectors more significantly than the market as a whole. For example, health care can be hurt by rising expenses and dependency on third party reimbursements, transportation can be impacted by declining revenues or unexpectedly high construction costs, utilities are subject to governmental rate regulation, and private activity bonds rely on project revenues and the creditworthiness of the corporate user as opposed to governmental support.</font><br/><br/><font style="FONT-STYLE: italic; FONT-FAMILY: Times New Roman; FONT-WEIGHT: bold; font-size: 10pt">Liquidity risk </font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">This is the risk that the fund may not be able to sell a holding in a timely manner at a desired price. The secondary market for certain municipal bonds tends to be less developed and liquid than many other securities markets, which may adversely affect the fund&#8217;s ability to sell such municipal bonds at attractive prices.</font><font style="FONT-FAMILY: Arial; FONT-SIZE: 9.5pt; FONT-WEIGHT: bold">Performance</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">Because the fund commenced operations in 2012, there is no historical performance information shown here. Performance history will be presented after the fund has been in operation for one full calendar year. <br/><br/>Current performance information may be obtained through troweprice.com or by calling 1-800-225-5132. </font><font style="FONT-STYLE: normal; FONT-FAMILY: Arial; font-size: 7pt">June 30, 2015</font><font style="FONT-STYLE: normal; FONT-FAMILY: Arial; font-size: 7pt">Other expenses are estimated.</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">The fund&#8217;s share price fluctuates, which means you could lose money by investing in the fund.</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">troweprice.com</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">1-800-225-5132</font><font style="FONT-STYLE: normal; FONT-FAMILY: Times New Roman; font-size: 10pt">Because the fund commenced operations in 2012, there is no historical performance information shown here. Performance history will be presented after the fund has been in operation for one full calendar year.</font><div style="display:none">~ http://www.troweprice.com/role/ScheduleShareholderFeesT.RowePriceTax-FreeUltraShort-TermBondFund column period compact * ~</div>
<div style="display:none">~ http://www.troweprice.com/role/ScheduleAnnualFundOperatingExpensesT.RowePriceTax-FreeUltraShort-TermBondFund column period compact * ~</div>
<div style="display:none">~ http://www.troweprice.com/role/ScheduleExpenseExampleTransposedT.RowePriceTax-FreeUltraShort-TermBondFund column period compact * ~</div>
2012-11-19Subject to certain exceptions, accounts with a balance of less than $10,000 are charged an annual $20 fee.Other expenses are estimated.T. Rowe Price Associates, Inc. has agreed (through June 30, 2015) to waive its fees and/or bear any expenses (excluding interest, taxes, brokerage, extraordinary expenses, and acquired fund fees) that would cause the fund's ratio of expenses to average net assets to exceed 0.35%. Termination of the agreement would require approval by the fund's Board of Directors. Fees waived and expenses paid under this agreement are subject to reimbursement to T. Rowe Price Associates, Inc. by the fund whenever the fund's expense ratio is below 0.35%. However, no reimbursement will be made more than three years after the waiver or payment, or if it would result in the expense ratio exceeding 0.35% (excluding interest, taxes, brokerage, extraordinary expenses, and acquired fund fees).